US Mortgage Spread Drops to a 3-Year Low

‘If the Fed cuts interest rates as expected in September—or more than expected—mortgage rates may fall more than anticipated,’ said Redfin economist Chen Zhao.

Homes await buyers in Irvine, Calif., on Sept. 21, 2020. John Fredricks/The Epoch Times

The mortgage spread has dropped to its lowest level in more than three years, signifying better rates for home buyers and those looking to refinance, according to an Aug. 26 report from real estate brokerage Redfin.

A lower mortgage spread—the gap between 10-year treasury yields and mortgage rates—indicates lower mortgage rates, with a further decline suggesting a bigger drop in rates, the brokerage said.